Excerpt:.....by her husband was to be treated as huf property. he urged that under the hindu system of law a joint family may consist of a single male member and the widow of a deceased male member and that the income-tax act, 1961, nowhere indicates that the huf must have at least two male members. according to him, the supreme court held in many cases that the property of the joint family did not cease to belong to the family merely because the family was represented by a single coparcener. he relied on the decision of the patna high court in the case of savitri devi v. cit [1976] 104 itr 385. the learned departmental representative, on the other hand, relied on the .decision of the supreme court in the case of guntpad khandappa magdum v. hirabai khandappa magdum [1981] 129 itr 440 and contended.....

Judgment: 1. These two appeals by the assessee are directed against the combined order of the AAC dated 10-1-1983 by which he held that one-third share in the estate left by the late Balkrishanlal Poddar was includible in the net wealth of the assessee.

2. The father of the late Balkrisanlal Poddar died on 20-10-1949 leaving the assessee and his brother, Sriniwas Poddar. On his death the movable and immovable properties left by him devolved on the HUF consisting of his two sons named hereinbefore. A deed was executed by the widows of S.D. Poddar and Balkrishanlal Poddar ratifying the partition of the HUF consisting of S.D. Poddar and B.K. Poddar which was effected sometime back, as is evident from the order of the AAC dated 5-4-1982 in Appeal Nos. 471/475/XIII/VI/1979-80, etc. The present assessee received some movable and immovable properties on the death of her husband, late Balkrishanlal Poddar. She also adopted one Brijendra Kumar on 15-2-1965 in accordance with the wishes of her husband. The WTO included one-third share in the estate left by Balkrishan'al Poddar in the net wealth of the assessee so also the balance with the estate of late B.K. Poddar as per balance sheet in the name of the assessee.

3. On appeal, the AAC confirmed the action of the WTO by relying on the decision of the Mysore High Court in the case of CIT v. Smt.

Nagarathnamma [1970] 76 ITR 352.

4. The assessee has carried the matter in further appeal before the Tribunal. It was contended by the learned counsel for the assessee that the lower authorities were wrong in including one-third share in the property and/or the estate left by the deceased in the net wealth of the assessee. He pointed out that in the income-tax appeals the AAC himself held that the income from the aforesaid property was not includible in the total income of the assessee. He pointed out that the assessee adopted a son according to the wishes of her husband in 1965 and, therefore, there was no dispute about the fact that the property left by her husband was to be treated as HUF property. He urged that under the Hindu system of law a joint family may consist of a single male member and the widow of a deceased male member and that the Income-tax Act, 1961, nowhere indicates that the HUF must have at least two male members. According to him, the Supreme Court held in many cases that the property of the joint family did not cease to belong to the family merely because the family was represented by a single coparcener. He relied on the decision of the Patna High Court in the case of Savitri Devi v. CIT [1976] 104 ITR 385. The learned departmental representative, on the other hand, relied on the .decision of the Supreme Court in the case of Guntpad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440 and contended that according to the provisions of Section 6 of the Hindu Succession Act, 1956, the right of the legal heirs on the death of a coparcener to the property left by the coparcener is that would have been allotted to such coparcener if a partition of the joint family had in fact, taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased.

He, therefore, submitted that the assessee's share in the coparcenary property must be ascertained by adding the share to which she would be entitled on a notional partition immediately before her husband's death and, therefore, the lower authorities were justified in including one-third share in the property left by the assessee's husband.

5. We have heard the submissions of both the parties and considered the facts on record. The fact that late Balkrisnanlal Poddar received half share of the movable and immovable properties left by his father on partition is borne by evidence on record as mentioned hereinbefore. In such a situation it has to be considered whether the status of the assessee is HUF or not. In the case of CWT v. Pannalal Rastogi [1974] 96 ITR 110 (Pat.) the assessee on partition of the erstwhile joint property received certain properties. The family of the assessee consisted of himself and his wife. There was no issue, either male or female. On the aforesaid facts the Patna High Court held that the status of the assessee was to be HUF for the purpose of wealth-tax.

Reference may be made to the decision of the Allahabad High Court in the case of Prem Kumar v. CIT [1980] 121 ITR 347 wherein it has been held that the property falling to a single coparcener on partition does not lose its character as a joint family property solely for the reason that there is no other member, male or female, at a particular point of time. Under the Hindu Law, it is not predicated of a Hindu joint family that there must be a male member in existence. Even after the death of the sole male member, so long as the property which was originally of the joint Hindu family remains in the hands of the widows of the members of the family and is not divided among them, the joint family continues. For this proposition, reference may be made to the decision of the Supreme Court in the case of CIT v. Em. Ar. Ar. Veerappa Chettiar [1970] 76 ITR 467. Then, again, in the case of Savitri Devi (supra) the husband having wife, a son and a daughter died. Thereafter his son also died. The widow adopted a son. It was held by the Patna High Court that even before the adoption as well as after the adoption, the HUF retained its character as HUF. Bearing this principle in mind and considering the facts of the present case it has to be held that the status of the assessee was HUF. Much reliance was placed by the learned departmental representative on the decision in the case of Gurupad Khandappa Magdum (supra) in which it was observed that Explanation 1 to Section 6 of the Hindu Succession Act resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener 'shall be deemed to be' the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. But we are of the opinion that this decision does not help the revenue. In the case of Malchand Thirani & Sons v. CIT [1980] 121 ITR 976 the Calcutta High Court has made it clear that the provisions of Section 6 of the Hindu Succession Act use the words 'Mitakshara coparcenary property' and not the words, 'joint family property'. Therefore, the main Section 6 of the Hindu Succession Act cannot apply where a Hindu dies without leaving a coparcener for it is elementary that inheritance can never remain in abeyance. Further, Section 6 has no application to the property received by a member of a joint family on partition. In view of our aforesaid observation, we hold that the properties left by the husband of the assesse were assessable as HUF properties for the purpose of wealth-tax and, accordingly, the lower authorities were not justified in including one-third interest in the HUF Balkrishanlal Poddar in the net wealth of the assessee.